Problem 23-4

1. Acquisition
Machinery 3,000,000
Accounts Payable 3,000,000
Payment
Accounts Payable 3,000,000
Purchase Discount Loss (3Mx10%) 300,000
Cash 3,000,000
Machinery 300,000

Loss on retirement of old machinery 50,000

Spare Parts inventory 150,000
Cash 200,000

2. Acquisition

Machinery 4,700,000

Interest Expense 800,000

Cash 500,000

Notes Payable 5,000,000

Payment

Notes Payable 5,000,000

Cash 5,000,000

3. Acquisition
Machinery (500,000 x 3.17) 1,585,000
Discount on Note Payable 415,000
Note Payable 2,000,000

Payment
N/P 500,000
Cash 500,000
Interest Expense 158,500
Discount on N/P 158,500
4. Acquisition
Machinery (2Mx.68) 1,360,000
Discount on N/P 640,000
N/P 2,000,000
Interest
Interest Expense (10%x1,360,0000) 136,000
Discount on N/P 136,000
Problem 23-6

1.
Computer 430,000
Inventory 300,000
Cash 50,000
Gain on exchange 80,000
2.
Machinery-new (110,000+30,000) 140,000
Accumulated Depreciation 120,000
Loss on Exchange (Note 1) 10,000
Machinery- old 240,000
Cash 30,000
Note 1
Fair value of the given asset 110,000
Less: Carrying Amount (240,000- 120,000) 120,000
Loss on Exchange (10,000)
3. Equipment-new 1,000,000
Loss on Exchange 200,000
Accumulated Depreciation 1,800,000
Equipment-old 3,000,000
35r